GameStop sales are drying up as gamers lose interest in the latest generation of consoles.

GameStop's full-year profit forecast missed Wall Street expectations part of the problem was that the US dollar strengthened and demand for new PlayStation 4 and Xbox One consoles failed to make up for falling sales of earlier versions.

Shares of the world's largest retailer of video game products, which also reported a quarterly profit that missed estimates, fell 6 percent in after-market trading on Thursday.

Demand for Microsoft Xbox One and Sony PlayStation 4 consoles have also cooled off since the holiday shopping season. Both consoles were hugely popular in the year following their launches in November 2013.

The eighth-generation video game consoles followed PlayStation 3 and Xbox 360.

GameStop, which reported a 30.2 percent drop in new video game hardware sales in the fourth quarter ended Jan. 31, expects older hardware sales to fall more than 50 percent in 2015.

The company is betting on PS4 and Xbox One software and mobile sales to make up for weak demand for consoles.GameStop hopes that its bottom line will be boosted by new Mortal Kombat and Batman games in the coming months.

Bob Puzon who is the senior VP of merchandising for GameStop says that since the new Kinect-less Xbox One went on sale Monday it has been “flying off the shelves”. The news has been well received by Microsoft who is pleased to see the surge in sales that was reported on Monday.

While the Kinect-less Xbox One has not been a hit with the developers who have been supporting the Kinect, it will be interesting to see how well the stand alone Kinect sells when it becomes available later this year. Just how many of those that buy the Kinect-less Xbox One bundle will come back later and actual decide to purchase a Kinect.

Developers who have been supporting the Kinect with titles have been quoted as saying that they feel like Microsoft pulled the rug out from under them. Perhaps the one developer who has the most to lose is Harmonix who has both a new Dance Central and Disney Fantasia to be released soon for the Xbox One with Kinect. Dance Central has been recognized as perhaps the best of the titles that were released for the original Kinect on the Xbox 360 and with the additional power and added performance of the Xbox One Kinect, it will be interesting to see the difference and improvement.

Independent dealers we have checked with have reported similar sales surge for the Xbox One as well. As one dealer told us, “I was able to sell all of the Kinect-less Xbox One units we received. In fact we have had calls asking for the Kinect-less Xbox One console and up until this week the only calls we were getting is people asking for PS4 consoles.” We are sure that Microsoft could not be more pleased with reports from the field like this.

While discussing GameStop’s latest financials, the company says that its current allocation of PlayStation 4 consoles is already sold out. The company says it believes that Sony will move over 2 million units before the end of the quarter.

What is perhaps more shocking is that the company says that 2.3 million people are still waiting on a PlayStation 4 console. While Sony says that it has already sold 1 million consoles in the first 24 hours, it isn’t clear yet how many more consoles they can produce to satisfy the holiday demand.

While the Sony PS4 is out the door, GameStop also expects heavy sales of the Xbox One as well. The company was not clear about how many more consoles it can expect of each unit. The company does think it can move as many as it can get.

GameStop has pulled the plug for the time being on customers’ ability to pre-order the PlayStation 4. The company has a pre-order for each PS4 console that Sony has guaranteed the retailer in its initial allotment. Attempts to pre-order the PS4 in-person at retail stores or via the company’s web site will not be completed at this time.

GameStop is starting another waiting list for those that want to pre-order a PS4 console, and those interested can submit their names via the GameStop website to be notified if and when additional consoles become available for pre-order. Sources tell us (and it really comes as no surprise) that the company is attempting to work with Sony to boost its initial allotment, but it is unknown if they will be successful in doing so. Reports continue to suggest that Sony is already going to have a difficult time fulfilling the orders that it has to meet launch day. A steady stream of PS4 consoles are expected to be heading to retailers after launch day, however, if sources are correct.

GameStop is still taking pre-orders for the Xbox One both in person and via the company’s website. Other retailers do seem to still be accepting pre-orders for the PS4 for launch day delivery. It is unclear how long availability for pre-orders through other retailers for launch day delivery will last. Our retail sources tell us that at least right now the PS4 looks to be the “must have” console for this holiday season; and we expect supplies prior to Christmas to be very tight.

The talk of pre-owned games being blocked on the next evolution of consoles has taken an interesting turn. Sony has filed for a patent for new technology whose sole purpose is block the ability to play pre-owned or used games that have already been “tagged” to another console.

The technology apparently takes a NFC-style approach where each copy of the game is “tagged” and then the title is tied to a console or user account or even the two combined. The system then checks the tag before playing the title and then it can block playback of titles that are not tied to the console or user account or the two combined, depending on how the technology is configured and deployed.

The news that both Sony and Microsoft were looking at anti-used game technology is not new. It has been previously rumored at certain points that either the PS4 or Xbox Next would deploy this technology as part of the console’s strategy to stamp out used game sales. Most analysts believe that the technology will not be deployed as part of the PS4 or Xbox Next, but with the news of this patent, it does seem to lead one to believe that this is where the future will be heading.

It is believed by many analysts that we have spoken with that a move to block the use of used games would be a move that could figure heavily into the ability to sell a new console. The move would be anti-consumer in nature and would certainly affect GameStop who both hardware and software companies have come to be partners with, like it or not due to the chain’s strong sales, which mostly come from the sale of used titles.

While clearly the technology to block the use of user titles has existed for a long time and, in fact, might have been possible to even have been deployed on the Xbox 360 or PlayStation 3, both Microsoft and Sony choose not to deploy such technology; they have instead watched as software publishers have used one-use codes that have been bundled with new games that unlock online game play, for example, as the main weapon against used game sales. Forcing used game players to purchase the $10 code to unlock the block features has proved effective, according to those we have spoken with, but not as effective as software publishers would like. Some software publishers have expressed at least an interest in seeing strong measures deployed and available to software publishers as an option with the next round of consoles.

GameStop has started a waiting list for the Wii U at most retail store locations. According to what we have been told, you can only get on the wait list if you are a PowerUp Rewards member. The wait list gets you a phone call or Email when the store has systems available for purchase.

You cannot apparently put money down on a Wii U that you are on the wait list for, and you can’t reserve more than two consoles. However, you can choose from the Basic or Deluxe edition of the console.

If notified that your local Game Stop has a Wii U for you to pick up, you have 24 hours from the notification to come and pick it up. You have to go into your local GameStop location to get on the waiting list and, of course, just because you are on the waiting list does not assure you of getting a Wii U before the holiday.

Sources from the GameStop empire have confirmed to us that they are already sold out of their pre-order allocation of the Deluxe configuration of the Wii U; and at the rate that the Basic configuration is selling, it will not be much longer before GameStop is sold out of their entire pre-order allocation for the Wii U.

Store employees are being told nothing about the possibility of additional stock or when that stock might arrive. The number of pre-orders for the Wii U has surprised the GameStop employees that we have spoken with, who admit that they didn’t think it would take off for pre-order as it did.

According to our sources, in all likelihood GameStop will get additional inventory of the Wii U to sell, but it is difficult to say in what kind of numbers it will arrive. With the news that supplies will be tight and the number of units available in North America will be limited, it would seem that many will not be able to get the Wii U that they seek for the holidays.

A court ruling could forever change the way that GameStop sells used titles. At least in California GameStop will have to warn customers about used titles they have for sale that will require users to buy an online pass to access some features within the game.

At least for the next two years, the retailer will have to place signs on used game shelves warning customers that they will be required to make an additional purchase of an online pass to access some features when buying certain used titles.

The class action lawsuit alleged that GameStop was misleading customers about the true cost of purchasing titles that included an online pass when the title was new. The ruling is expected to affect the price that GameStop is able to charge for used titles, and put an end to the practice of the company’s sale of used titles that included an online pass for $5 less than the cost of a new title.

GameStop customers that are enrolled in the company’s rewards program in California will be able to claim a $10 check and $5 coupon as compensation. Those in California that are not in the company’s rewards program can claim a $5 check and a $10 coupon.

With this victory under its belt, the law firm of Baron & Budd is contemplating bringing similar actions against GameStop in other states, according to sources.

It seems players in North America could not wait to experience the third installment in the Mass Effect franchise, as the title is off to an excellent sales start in North America. While Electronic Arts has said they expected the title to do well, they were not expecting this type of response immediately.

EA has confirmed that the title was able to move 890,000 copies in North America in the first 24 hours, which puts it far ahead of what they anticipated. GameStop confirmed that more than 40% of buyers are purchasing a download code with their copy of Mass Effect 3 to add additional Day One DLC content.

With the excellent sales of Mass Effect 3 in North America comes word from some retailers in North America that they are already out of Mass Effect 3, and they are not sure when more copies will arrive. One retailer who is part of a smaller chain tells us, “I sold all of my pre-orders and the additional copies that I had set aside for walk-ins; and I have already received one additional shipment and sold out of those. I placed an order for more, only to be told that the warehouse is waiting for more copies to arrive, so there will be at least a small delay till I have more copies. This, of course, isn’t the news that I wanted to hear.”

EA is expecting Mass Effect 3 to do well for the company, as it is one of the key franchise releases this year. We should know more about European sales in the next couple of days; but initial projections from our sources suggest that EA could already be over 2 million units sold once all of the numbers from this past weekend are totaled up.